Greece: Logistics & Industrial Market Snapshot
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Greece: Logistics & Industrial Market Snapshot Q2 2019 Delfi Real Estate | 1 | Research & Analytics Desk | 2Q2019 DISCLAIMER & LEGAL DISCLOSURES emanate from publicly available information or information from Delfi Real Estate. analysts. Report Origin To the extend this report is based on or contains information This publication report originates from DELFI REAL ESTATE, emanating from other sources, Delfi Real Estate. has deemed global tradename “Delfi Real Estate.” and “Delfi Real Estate”. the Other Sources to be reliable, but cannot guarantee their accuracy, adequacy or completeness. Report Content Limitation of liability This report has been prepared solely by Delfi Partners & Co. Opinions or suggestions of Delfi Real Estate. may deviate from The opinions expressed in this report, are subject to certain recommendations or opinions presented by other departments reservations in terms of uncertainties derived from changes to of the Company. 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Validity of the report This report is intended only to provide general and preliminary information on the Greek real estate market and shall not be construed as the basis for any investment decision. This report has been prepared by Delfi Real Estate. as general information for private use to the parties that the report has been distributed, but it is not intended as a recommendation of particular strategies or product and thus does not provide investment advice. Before acting on any information in this report or publication, it is recommendable to perform one’s own research and consult with their advisors. Sources This report may be based on or contain information, such as opinions, recommendations, prices and estimates which Delfi Real Estate | 2 | Research & Analytics Desk | 2Q2019 1. Greek Economy Overview demand and improved competitiveness. Investment The end of the long fiscal adjustment marked by the and private consumption are expected to recover as completion of the third program in August 2018 confidence rebuilds, following improved fiscal could inaugurate a return to economic normality in credibility. The maintained high excess capacity will Greece. In the aftermath of the global financial crisis limit price and wage pressures. of 2008 during which Greece sank into recession recording negative GDP growth for eight 1.2. Greece broke its new record in tourist arrivals during 2018 reaching 33million arrivals consecutive years (2009 – 2016), the economy According to the Bank of Greece, travel revenues seems to be stabilising and bouncing back towards totalled €15.8bn, up 9.7% relative to the same period a more sustainable trajectory, assuming that the of 2017. Visitor flows through airports increased by actions agreed in the third review will be 13.6%, while visitor flows through road border- implemented and the Greek government will bring crossing points increased by 5.8%. In addition, the about the reforms that are designed to attract number of visitors from Germany increased by foreign investment. Market appetite has been tested 18.4% to 4,343 thousand, as did the number of with the issue of a 5 Year Government Fixed Income visitors from France, by 7.0% to 1,511 thousand. Security earlier this year. The 3.45% coupon issue According to data from Athens International Airport, was oversubscribed, and Greece drew in 2018, 24.14 million passengers travelled through approximately 2.5 billion euros, while there are the airport, an increase of 2.4 million compared to plans for issuing a new 10-year benchmark bond 2017. later this year. 1.3. In August 2018, Greece successfully concludes its GDP growth, Unemployment and Inflation in Greece European Stability Mechanism (ESM) program % GDP growth Inflation Unemployment rate (European Commission) 30 Greece exited its three-year ESM financial 20 assistance programme successfully in August 2018. 10 This follows the disbursement of €61.9 billion by the ESM over three years in support of macroeconomic 0 adjustment and bank recapitalisation. -10 1.4. Foreign Direct Investment Inflows reached -20 EUR3.5bn in 2018, an increase of 9% YoY 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: IMF, edited by Delfi Partners & Co. 1.4.1. Golden Visa Scheme In 2013, the Greek government launched the Golden 1.1. GDP growth is expected to be 2.2% by YE2020 Visa program whereby investors buying property (IMF) The government’s plan to revive the construction valued at minimum €250,000 are eligible for a sector culminated into schemes designed to attract residence permit. Since the launch of the program foreign investments. The years of 2016 and 2017 and up to the end of 2018, more than 3,620 marked a new era for the real estate market in residence permits have been granted to Greece. Strong macroeconomic performance investors/property owners. More than 9,756 resulted in renewed confidence and trust for the residence permits have been granted to country as an investment destination. In 2017, the investors/property owners and their families for total first signs of economic recovery were noted with an investments in excess of €1.5bn in Real Estate. increase of 1,5% in the Gross Domestic Product Residence Permits Nationalities (GDP), an upward trend that was strengthened 5,367 during 2018 marking a 2.2% increase. Inflation remains in the neighbourhood of 0.8% and the 1,028 1,012 336 658 European Commission expects it to reach 1.3% by 325 285 200 189 182 174 2020. According to the International Monetary Fund, GDP growth is projected to rise to 2.4% in 2019 and 2.2% in 2020. The main driver of growth is attributed Source: Enterprise Greece, edited by Delfi Partners & Co. to exports, taking advantage of rising external Delfi Real Estate | 3 | Research & Analytics Desk | 2Q2019 1.5. Capital controls were lifted in September 2018 Rents for Prime Properties - Offices Sector following three years of economic recovery Syntagma CBD Broad Kifisias Av. Sygrou Av. Mesogeion Av. Greece raised the monthly limit of cash that can be €/ SQM 35.0 withdrawn from bank accounts to €5,000 from 30.0 €2,300 euros as part of measures to ease capital 25.0 controls imposed in 2015. Athens first imposed 20.0 capital controls in the summer of 2015 aiming to 15.0 restrain excess withdrawals from the banking system 10.0 5.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Delfi Real Estate Decentralized Authorities issuing permits to investors/property owners 3. Delfi Property Price Index 1.143 968 Greece is strategically positioned at the crossroad of 644 three continents (Europe, Asia, Africa) and has been 198 139 120 197 64 60 51 36 since early antiquity, a strategic node for transportation in the greater region. Due to Greece’s advantageous location and the Source: Enterprise Greece, edited by Delfi Partners & Co. strategic position of its ports, it can offer competitive during the debt crisis that led to its third financial freight costs. Furthermore, Greek ship-owners bailout since 2010. The country’s rapid return to control the world’s largest merchant fleet and due to international financial markets marked a significantly Greece’s manufacturing and maritime tradition, positive step towards restoring confidence and availability of know-how and skilled labour is in credibility. abundance. 2. Real Estate Market Overview 3.1 Logistics Market Overview The real estate market is positively affected by Today, the Logistics industry represents 10.8% of strong signs of stabilisation in the Greek economy as GDP while maintaining a significant margin with well as anticipated return to growth in the coming potential to expand even further.